Thursday, October 09, 2014

Setback to Ahmedabad's urban model? City malls witness 48% decline in footfalls, one of the highest in India

One of the Ahmedabad mallswhich closed down

By Our Representative

Are Ahmedabad’s malls, tom-tommed as an “example” of the
city’s urban model, set to further lose their charm? It would seem so, if one
goes by top industries body Associated Chamber of Commerce and Industry of
India (ASSOCHAM) report, which says that Ahmedabad’s malls has seen one of the
highest declines in “footfalls” in India, next only to Delhi-National Capital
Region (NCR). As per an ASSOCHAM survey, Delhi-NCR recorded the highest decline
in footfalls at city malls (49.5%) , followed very closely by Ahmedabad (48.2%).

Other cities that have seen a high fall in “footfall” are
Chennai (46%), Mumbai (42%) and Hyderabad (39%), the survey results, released
by ASSOCHAM, said. While roughly 250-300 malls came up in the country in the
last two years, 80-85% of the spaces in these malls still lie vacant. In
Ahmedabad, the situation has particularly taken from bad to worse, as few of
the top malls recently closed their shops or reduced their capacity drastically. Several of them were built by offering them huge concessions, and without even necessary environmental clearances.

ASSOCHAM does not think that this is due to recession having
overtaken the cities, but because “online shopping has proved especially harsh
for shopping malls.” The survey was conducted in 10 cities-Delhi-NCR, Mumbai,
Ahmedabad, Chennai, Kolkata, Hyderabad, Chennai, Bangalore, Chandigarh and
Dehradun. ASSOCHAM thinks, “Online shopping industry in India is fast catching
on, not just in the larger metros but also in the smaller cities.”
The industry body estimates, things will only worsen for the malls this Diwali,
when online shopping may increase by 350% as against the jump of 200% in
August-September. The result is that, it says, “shopping malls have started
feeling jittery as the footfalls in malls are likely to go down by 50-55%”.
ASSOCHAM, however, does not provide inter-city comparison of how much has
online actually caught up.
“During Diwali, Online shopping estimated to cross Rs 10,000 crore”, says
ASSOCHAM, adding, “The online retailing to see the biggest flip ever in the
history, going forward this trend will not only continue but it will grow by
leaps and bounds. “At present the market is estimated at Rs. 12,000 crore and
could cross Rs. 1,00,000 crore a year in India over the next three to four
years”.
The survey, titled “Indian Online Retail Sales Surge in Festive Season”, reveals
that there is more than a fivefold increase in revenue generated through
e-commerce as compared to last year with all branded apparel, accessories,
jewellery, gifts, footwear are available at a cheaper rates and delivered at
the doorstep within two to three days. According to ASSOCHAM secretary-general DS
Rawat, “Whole new audience is connected 24x7 through their smart phones,
tablets and other mobile devices which are leading to a gradual evolution of
e-commerce”.
ASSOCHAM said, e-commerce sales in August and September grew by 200% from the
same months in 2013 (120%), with mobile sales booming 100%. “Consumers are
turning to the internet savvy because of the fast and simple payment and
delivery service. Online shopping is estimated to be up by 350% during the
festive season than visiting bricks and mortar stores, adds its report”, it
insisted, adding, “This festive season, shopping on ground has taken a back
seat. Apart from convenience, rising fuel price, security reasons, online
discounts and availability with abundance of choices are keeping consumers
indoors”.